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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: This is the bloom Big Day Break you at podcast.

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Speaker 2: Good morning, It's Tuesday, the sixteenth of September. I'm Caroline

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Speaker 2: Hepga in London.

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Speaker 1: And I'm Stephen Caroline Brussels. Coming up today, Carostarmer rolls

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Speaker 1: out the red carpet as Donald Trump expects to announce

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Speaker 1: deals worth more than ten billion dollars during his state

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Speaker 1: visit to the UK.

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Speaker 2: An appeals court blocked the US President's efforts to fire

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Speaker 2: Federal Reserve Governor Lisa Cook ahead of tomorrow's interest rate decision.

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Speaker 1: Plus more capital or a new headquarters abroad? Could UBS

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Speaker 1: really take the nuclear option in its showdown with the

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Speaker 1: Swiss government.

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Speaker 2: Let's start with a roundup of our top stories.

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Speaker 1: Economic deals totaling more than ten billion dollars are expected

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Speaker 1: to be announced during US President Donald Trump's state visit

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Speaker 1: to the UK, which begins later today. It comes as

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Speaker 1: London's Final Sector called on the government to go further

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Speaker 1: to attract private investment into British assets. Bloomberg's teaa adebio has.

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Speaker 3: More a science in technology partnership, plans to build nuclear

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Speaker 3: power stations and deeper financial connections just some of the

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Speaker 3: goods on offer to the UK. As Donald Trump's US

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Speaker 3: delegation prepares to visit, But whilst Kirs Starmer gears up

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Speaker 3: to host discussions with the President in the English countryside,

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Speaker 3: the country's financial hub is calling for change. According to

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Speaker 3: a City of London Corporation report, the UK faces one

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Speaker 3: hundred and fifty billion pounds in unmet funding needs over

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Speaker 3: the next five years. The financial district's governing body are

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Speaker 3: calling for measures to steer pension capital into UK equities.

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Speaker 3: This just weeks ahead of an autumn budget that economists

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Speaker 3: widely expect to hike taxes to fill a fiscal hole.

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Speaker 3: In London, Tiwa ad a bio Bloomberg radio.

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Speaker 2: Well saying in the UK, the Prime Minister Kis Starmer

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Speaker 2: has lost a third key ally from government in less

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Speaker 2: than two weeks. Starmer's director of strategy, Paul Ovenden, resigned

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Speaker 2: after sexually explicit comments he made in twenty seventeen were

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Speaker 2: published by ITV News. The senior advisor's exit comes after

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Speaker 2: Starmer lost both his deputy Prime Minister and ambassador to

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Speaker 2: the United States over separate scandals. In his first public

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Speaker 2: comments since he fired ambassador Peter Mandelson. The Prime Minister,

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Speaker 2: says that Mandelson's ties to Jeffrey Epstein made his position untenable.

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Speaker 4: Had I known then what I know now, i'd never

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Speaker 4: appointed him, because what emerged last week were emails Bloomberg

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Speaker 4: emails which showed that the nature and extent of the

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Speaker 4: relationship that Peter Mandelson had with Epstein was far different

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Speaker 4: to what I had understood to be the position.

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Speaker 2: But Starmer's decision is likely to be a sore point

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Speaker 2: doing Trump's visit, given the US leader's own struggle to

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Speaker 2: move on from questions about his ties to Epstein. The

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Speaker 2: loss of so many senior figures in a short time

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Speaker 2: in the UK is leading some to question how stable

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Speaker 2: Starmer's own position is despite his large majority in Parliament.

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Speaker 1: A growing number of economists believe the Bank of England

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Speaker 1: has finished cutting interest rates as it grapples with a

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Speaker 1: fresh spike in inflation. Figures you out tomorrow are expected

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Speaker 1: to show inflation peaking at four percent this month, double

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Speaker 1: the bank's target. Membrooks, Freddie Filston has more.

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Speaker 5: Economists surveyed by Bloomberg say they believe the BOE will

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Speaker 5: keep rates at four percent for the foreseeable future. The group,

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Speaker 5: which includes Santander, Schroeders and others, unanimously believes rates will

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Speaker 5: stay on hold this Thursday. The prospect of limited further

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Speaker 5: rate cuts or none at all, will pile further pressure

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Speaker 5: on Chancellor Rachel Reeves, who businesses blame for fueling inflation

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Speaker 5: with her twenty six billion pound tax hike on employers

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Speaker 5: in London. Freddie Fulston Bloomberg Radio Now.

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Speaker 2: Officials from the US and China have reached a framework

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Speaker 2: on keeping TikTok running in the United States. The deal

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Speaker 2: was reached during talks in Madrid, with Treasury Sectary Scott

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Speaker 2: Bessen confirming a plan for US ownership of the app.

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Speaker 2: CBS News reports that Oracle is among a group of

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Speaker 2: firms that could enable TikTok operations to continue. The framework

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Speaker 2: sets these stage for a phone call on Friday between

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Speaker 2: President Trump and President Hijinping. Donald Trump spoke to reporters

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Speaker 2: in the Oval Office.

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Speaker 6: It's important and it can maybe even bring us closer

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Speaker 6: to channel.

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Speaker 4: We had a very good meeting with John.

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Speaker 2: I was surprised.

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Speaker 7: I didn't expect it to that extent, and I'm going

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Speaker 7: to speak again with President Chi on.

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Speaker 1: Friday, and you know, I think I think that'll confirm

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Speaker 1: things up.

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Speaker 2: That was President Trump speaking there. China's Comma Ministry called

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Speaker 2: the deal a consensus, though some technical hurdles remain. The

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Speaker 2: breakthrough could unlock a long awayed Trump Gee summit at

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Speaker 2: an Asia Pacific Corporation Forum in South Korea, which will

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Speaker 2: take place at the end of next month.

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Speaker 1: The Federal Appeals Court has rejected President Trump's bid to

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Speaker 1: unseat the FED Governor Lisa Cook ahead of the rate

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Speaker 1: setting meeting. The ruling makes it more likely that Cook

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Speaker 1: will take part, although Trump could still ask the Supreme

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Speaker 1: Court to intervene. Meanwhile, the Senate confirmed Stephen Myron is

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Speaker 1: a FED governor. It'll pave the way for Myron, who's

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Speaker 1: currently Trump's economic advisor, to join the policymakers. Here is

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Speaker 1: Bloomberg's Katarina Sarreva.

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Speaker 7: We haven't seen a huge market reaction yet, you know,

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Speaker 7: even when he was first nominated by the President, there wasn't,

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Speaker 7: you know, some massive reaction. And that's kind of been

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Speaker 7: kind of interesting, right People have thought that maybe we

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Speaker 7: would see a bigger reaction now. Maybe part of that

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Speaker 7: is because he is just one role, you know, out

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Speaker 7: of twelve on the Federal Open Market Committee, so he's

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Speaker 7: alone is not going to change inter streight policy.

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Speaker 1: That's Bloomberg's Katerina Sarava. Myron has said that he would

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Speaker 1: take leave from his role as chair of the White

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Speaker 1: House Council of Economic Advisors, but not resign. It'll be

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Speaker 1: the first time in ninety years that are sitting White

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Speaker 1: House official will have a role in setting monetary policy.

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Speaker 2: Elsewhere, Deutsche Bank says that international investors are slashing their

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Speaker 2: dollar exposure at an unprecedented pace through currency hedges for

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Speaker 2: US stock and bond purchases. The bank says that for

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Speaker 2: the first time this decade, flows into dollar hedged ETFs

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Speaker 2: that by US assets have exceeded those in unhedged funds.

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Speaker 2: Writing in a note to clients, Deutschebank's global head of

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Speaker 2: currency Research, Georgia sarr Velos, says that he believes this

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Speaker 2: explains why the dollar remains weak despite international investors plowing

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Speaker 2: money back into USS.

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Speaker 1: Wall Street's main regulator says it's prioritizing President Trump's proposal

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Speaker 1: to reduce the frequency of corporate earnings reports. The SEC

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Speaker 1: says it's pursuing plans to quote further eliminate unnecessary regulatory

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Speaker 1: burdens on companies. It follows a social media post in

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Speaker 1: which Trump called for an end quarterly reports for investors.

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Speaker 1: Research Affiliates chair and founder Rob Arnett says the move

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Speaker 1: could increase companies long term focus.

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Speaker 8: I'm a libertarian. I prefer to let people and businesses

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Speaker 8: do what they want. I think a requirement of every

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Speaker 8: three months fine. Lift the requirement. If a company wants

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Speaker 8: to report every six months, every twelve months, that's fine.

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Speaker 8: Publicly traded it out a report at least once in

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Speaker 8: a while, but a requirement for quarterly reporting increases short termism.

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Speaker 8: I've often said that I will never ever work for

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Speaker 8: a publicly traded company again. I've been saying that for

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Speaker 8: a quarter century, and the reason is regulatory distraction and

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Speaker 8: short termism.

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Speaker 1: Search Affiliates chair and founder Rob Barnett. There As, supporters

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Speaker 1: of quarterly reporting say it's crucial for keeping investors informed

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Speaker 1: and reduces the chances of market manipulation.

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Speaker 2: Those are our top stories for you this morning. Let's

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Speaker 2: look at the markets where you have very bullish stock traders.

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Speaker 2: Asian stocks hitting record high MSCI Asia Pacific indexes up

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Speaker 2: seven tenths of one percent, ten days of gains in

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Speaker 2: a row. The S and P five hundred above six

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Speaker 2: six hundred, again on a stellar run, the expectation of

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Speaker 2: a FED rate cut on Wednesday's softer labor market conditions

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Speaker 2: and no big inflationary surprises. Gold has also climbed to

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Speaker 2: due record this morning, three thousand, six hundred and eighty

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Speaker 2: three dollars. We're up by another almost two tenths of

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Speaker 2: one percent. Treasuries are steady today, two year yields hovering

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Speaker 2: near their lowest since last September. The dollars also sliding,

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Speaker 2: and we get US retail sales data later on today.

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Speaker 2: Those are the markets in a moment.

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Speaker 1: More and what to expect from Donald trump state visit

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Speaker 1: to the UK, plus the options being considered by the

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Speaker 1: Swiss Bank UBS as it faces a massive increase in

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Speaker 1: capital requirements. Put another story that we've been reading this morning,

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Speaker 1: perhaps an optimistic spin on AI creativity. Karl, I feel

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Speaker 1: like you and I are the AI curmudgeons essentially in

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Speaker 1: this world. Move It's just me, but who worry about

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Speaker 1: thus being inundated with AI slot but Bradstone is the

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Speaker 1: editor of Bloomberg BusinessWeek. Has been writing about how the

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Speaker 1: AI generator content in social media in I suppose he's

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Speaker 1: looking at it from a boon in creativity point of

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Speaker 1: this is something you know. To be able to create

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Speaker 1: the great AI content, you still need to have imagination

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Speaker 1: to begin with. And he talks about one example, which

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Speaker 1: is this eight second clip of rabbits bouncing on a

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Speaker 1: trampoline outside made to look like grainy security footage. It's

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Speaker 1: in eight seconds one of them disappears, and this caused

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Speaker 1: a massive furori. I suppose we describe it as online

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Speaker 1: people got very excited about where was the rabbit? How

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Speaker 1: could it have disappeared? People guessing before it was flagged

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Speaker 1: as being AI generated, how it could have been done?

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Speaker 2: And not just a few people. This is millions and million,

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Speaker 2: two hundred and thirty million times this little video has

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Speaker 2: been viewed around the world. Look, even I have been

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Speaker 2: sucked into watching these AI videos on TikTok and elsewhere.

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Speaker 2: I mean the talking babies phenomenon, yes, I think basically

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Speaker 2: sometimes quite drking dogs.

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Speaker 1: There's talking dogs as well as the dog podcast. It's

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Speaker 1: called a podcast.

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Speaker 2: I mean, they're cute, they're a bit creepy, they're a

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Speaker 2: bit weird. Yes, it is creative, but it also does

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Speaker 2: suck up a lot of time, doesn't it. And it's

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Speaker 2: advertising back to you.

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Speaker 1: But I suppose the argument made by one of these

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Speaker 1: creators that spoke to Brad for this piece is is

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Speaker 1: this better than us just being marketed really fancy things

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Speaker 1: that make you feel bad about our lives. Wouldn't you

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Speaker 1: rather see a dog talk than feel bad that you

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Speaker 1: can't afford that, you know, car slash house, slash watch

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Speaker 1: slash holiday.

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Speaker 2: Yeah, look, I have less qualms about it because of

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Speaker 2: course they're AI generated, so the babies and the dogs

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Speaker 2: are actually not real babies and dons. They don't belong

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Speaker 2: to anybody, so actually you're kind of you're not infringing

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Speaker 2: on their privacy. I suppose it's just weird.

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Speaker 1: A good point to end a conversation about AI generation contaent, It.

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Speaker 2: Is just weird.

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Speaker 1: You could read Brad's peace. We'll put a LinkedIn in

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Speaker 1: our podcast show notes at sam Bloomberg dot com as well.

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Speaker 3: Well.

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Speaker 1: Let's bring you more now and what to expect from

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Speaker 1: the US President's state visit to the UK, which begins

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Speaker 1: later today. Our UK politics reporter James Wilcock is with

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Speaker 1: us from more James talkers through then. One of the

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Speaker 1: expectations around this visits, I.

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Speaker 9: Mean, we're expecting three days of pageantry. Donald Trump's US

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Speaker 9: president sets arrived this evening and we're going to be

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Speaker 9: getting a carriage, processions, royal salutes and a state banquet.

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Speaker 9: But behind these ceremonial events, it's an opportunity for both

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Speaker 9: diplomacy and for business. Alphabet have already announced this morning

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Speaker 9: they are investing five billion pounds into the UK's growing

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Speaker 9: AI economy. Bloomberg have learned that over the next few

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Speaker 9: days further multi billion dollar UK investments respected from UK

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Speaker 9: US companies, totaling as much as ten billion, if not more. Now,

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Speaker 9: this is going to be a big deal for Kissed Armer,

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Speaker 9: who has talked up both his relationship with Donald Trump

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Speaker 9: you as president, and also his ability to get foreign

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Speaker 9: direct investment into the country. So in some ways this

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Speaker 9: is going to be a good news story for a

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Speaker 9: prime minister who has been struggling in a few weeks

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Speaker 9: of difficult headlines.

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Speaker 2: Absolutely, and if it boosts economic growth in Britain, I'm

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Speaker 2: surely that's the man take that the government was elected on.

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Speaker 2: Everyone will cheer that if that is what flows from this,

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Speaker 2: but I suppose it's also there are some awkward elements

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Speaker 2: to this. I mean it is also awkward for kiss

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Speaker 2: Sar obviously from a party on the left. There's the

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Speaker 2: Mandalson scandal. There's lots of other issues that could emerge

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Speaker 2: over the course of these three days and lots of FaceTime,

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Speaker 2: but also lots of opportunities for things that go wrong.

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Speaker 9: I guess well, I mean, look like you say, the

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Speaker 9: ghosts at the feast or the ghost at the state banquet,

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Speaker 9: maybe I should say, is Peter Mandelson, who wasn't until

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Speaker 9: last week Britain's ambassador to the US, before a series

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Speaker 9: of emails reported on by Bloomberg lay clear the depths

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Speaker 9: of his relationship with the disgraced fancier Jeffrey Epstein. Now, look,

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Speaker 9: losing your ambassador before a visit from the leader of

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Speaker 9: the ambassador to the country is by any metric, a

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Speaker 9: diplomatic faux pas, sort of in the gallery Hall of Fame,

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Speaker 9: and so much of the state visit is a gambit

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Speaker 9: by Britain to say we will put our all into

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Speaker 9: winning over one very powerful person, and this is always

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Speaker 9: how the UK establishment has done it. In exchange for

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Speaker 9: if we put everything into impressing US President dal Trump,

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Speaker 9: we will get hopefully the sort of system goes economic

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Speaker 9: or diplomatic coups. And so the whole point is then

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Speaker 9: to make sure that US President dal Trump has a

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Speaker 9: good time and so to that thing. Things that could

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Speaker 9: sort of derail here are any sort of difficult questions

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Speaker 9: about Epstein or Mandelson at the press conference, but also

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Speaker 9: questions around sort of Vice President jd Vance's concerns around

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Speaker 9: UK free speech that's been a big mag of issue.

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Speaker 9: Tesla Ceo Elon Musk just over the weekend made some

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Speaker 9: incredibly incendiy remarks. The UK partitions here have already all

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Speaker 9: condemned in the mainstream. We're talking to liberal Democrats, even

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Speaker 9: Nagel Frash from Reform UK. There's also the risk of

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Speaker 9: UK protests. I mean, in Trump's first term when he visited,

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Speaker 9: there was a now infamous blimp of Trump shaped like

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Speaker 9: a baby that flew over London, which he then commented

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Speaker 9: on in viun of the Sun. If the whole point

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Speaker 9: of this is for Kirs Starmer is to have deliberable gains,

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Speaker 9: so for the UK public, if at the end of

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Speaker 9: this summit, the state visit, there aren't deliverable gains. That

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Speaker 9: also raises questions about his efficacy.

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Speaker 1: This is all happening at a time, James, when Kirs

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Speaker 1: Starmer has seen plenty of upheaval in his own team,

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Speaker 1: and there is yet more of that today.

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Speaker 9: Yes, I mean that. Two weeks ago, after a very

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Speaker 9: difficult and bruising first year in government, Starmer declared the

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Speaker 9: start of phase two. It's going very well.

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Speaker 7: So far.

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Speaker 9: He has lost his deputy Prime Minister, he has sacked

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Speaker 9: his US ambassador and as of yesterday we can report

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Speaker 9: that also he has sacked one of his most senior

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Speaker 9: a's Paul Ovinden, after a series of sexual explicit texts

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Speaker 9: and emails from twenty seventeen published by TV. From the

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Speaker 9: people I speak to and Labor, the level of exasperation

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Speaker 9: towards the Starmer project is at a current all time

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Speaker 9: high because the problem they see is they don't yet

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Speaker 9: see a way out of the sort of sudden collapse

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Speaker 9: in the polls over the past year and what the

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Speaker 9: turnaround plan is. And two weeks ago was supposed to

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Speaker 9: be the start of the comeback plan, it has been

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Speaker 9: derailed at quite an incredible pace. The question is is

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Speaker 9: the state visit by Donald Trump a further extension of

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Speaker 9: the recent negative domestic headlines or a chance to actually

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Speaker 9: be a good news story that's been in the works

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Speaker 9: for months, with good economic story to turn all around

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Speaker 9: the next three days and a very mercurial US president

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Speaker 9: will decide, Yeah, it's.

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Speaker 2: Going to be absolutely fascinating to understand where those US

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Speaker 2: deals are going to be in technology and nuclear power

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Speaker 2: and other parts. Thank you so much to James Walcock

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Speaker 2: are UK politics reporter. Stay with us. More from Bloomberg

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Speaker 2: Daybaquube coming up after this.

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Speaker 1: To Switzerland. Next to our lawmakers have voted against a

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Speaker 1: second attempt to delay stricter band capital quality rules. The

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Speaker 1: changes will lift UBS as capital requirements and are part

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Speaker 1: of bigger reforms which will see the Swiss lender set

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Speaker 1: aside some twenty six billion dollars more. That's left executives

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Speaker 1: of the bank considering options, including moving its headquarters out

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Speaker 1: of the country. Our Swiss finance reporter Milliam Balazoo joins

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Speaker 1: us now for more. Mariam, good morning. How significant first

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Speaker 1: of all are these changes in capital rules for UBS?

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Speaker 6: It is a big deal for UBS. It is actually

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Speaker 6: something that sort of is distracting the bank a little

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Speaker 6: bit at the moment, as the focusing on the integration

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Speaker 6: of pretty Swiss. So these changes, there's a bunch of

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Speaker 6: proposals that the government that the Swiss government has made.

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Speaker 6: I'd say, by far, the most significant part of this

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Speaker 6: proposed change is the measure that would require UBS to

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Speaker 6: increase the amount of capital held at a Swiss base

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Speaker 6: and main unit against potential losses at foreign units to

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Speaker 6: one hundred percent. So the government has sort of estimated

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Speaker 6: that this alone could increase UBS's capital requirement by as

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Speaker 6: much as twenty six billion. So higher capital requirements can

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Speaker 6: make a bank safer, that's for sure, and that's the

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Speaker 6: thought process. However, it can make it less profitable, and

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Speaker 6: that's where the concern lies for UBS. So it's a

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Speaker 6: bit of a conundrum because obviously the Swiss government wants

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Speaker 6: all of that risk to be deducted from the parents' capital,

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Speaker 6: the parents banks capital, meaning that UBS is already sort

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Speaker 6: of prepared to shoulder major losses should things go badly

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Speaker 6: or badly wrong any of its units worldwide or any

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Speaker 6: of its business divisions. So basically, the Swiss government wants

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Speaker 6: UBS to shoulder any of the costs should there be

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Speaker 6: an issue, and bear in minunit we've witnessed the collapse

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Speaker 6: of Pretty Swiss not so long ago, so it's still

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Speaker 6: very raw.

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Speaker 2: And in terms of what that means for CEO Sergio

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Speaker 2: Marti and the likely options that are now being considered

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Speaker 2: by UBS as this has been something of a long

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Speaker 2: running process.

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Speaker 6: What next, Yeah, that's a very interesting question. There's still

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Speaker 6: at the drawing board at the moment. They are looking

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Speaker 6: at variety of options, and everything sort of ranges from

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Speaker 6: some very sort of mundane technical exercise that we'd get

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Speaker 6: them to this amount. There's something called upstreaming where the

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Speaker 6: company could also set aside some money each each quarter

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Speaker 6: and eventually get there because those proposal there and mind

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Speaker 6: this is a very lengthy process. It could take six

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Speaker 6: to eight years until it comes to fruition, so there's

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Speaker 6: time to sort of play around with technicalities to get

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Speaker 6: to that twenty six billion. There's also other kind of

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Speaker 6: financial tools such as s RTEs that the company is

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Speaker 6: looking at then. So these are the most sort of

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Speaker 6: smaller mundane ways to get to that amount, but there's

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Speaker 6: also ways that are a bit more radical that some

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Speaker 6: people within the company think should be explored, so we

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Speaker 6: looked at potentially spinning out some parts of the business

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Speaker 6: that are dragging the whole group, or even looking at MNA.

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Speaker 6: They need to bolster their presence in the US for instance,

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Speaker 6: in the longer run will bring them more capital, and

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Speaker 6: there is also obviously the option of simply relocating so

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Speaker 6: to go around the Swiss regulatory hurdles. So they were

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Speaker 6: looking at We had reported that a couple of months

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Speaker 6: ago that the company was looking at moving its headquarters

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Speaker 6: and then are looking at jurisdictions such as the US

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Speaker 6: for instance. But again from our reporting and our sources,

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Speaker 6: these are options that are not ideal for the bank,

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Speaker 6: that are not preferred either, same as shrinking. Like Sergio

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Speaker 6: and Marti has said previously, this.

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